The FTSE edged up on Wednesday, led by sugar and sweetener maker Tate & Lyle and banking consolidation talk, but miners and oils limited gains as some commodity prices fell.
Tate soared 5.5 percent, benefiting from a Merrill Lynch upgrade saying full year operating results are unlikely to disappoint.
By 11:52 a.m., the FTSE had risen 12.1 points, or 0.2 percent, to 5,949.2. U.S. stock futures were flat with the Dow Jones industrial average poised to extend its record peak ahead of a speech by Federal Reserve President Ben Bernanke.
Banks gained on further talk Citigroup will seek to acquire a European player.
Barclays rose 2.4 percent, bolstered by U.S. rivals touching record levels on Tuesday. Royal Bank of Scotland rose 1.6 percent, and HBOS gained 1.9 percent.
The economy received a confidence boost from figures showing Britain's service sector grew faster than expected in September, strategists said. But it bolstered expectations of a November rate hike. Halifax data showed September house prices rose 1 percent, suggesting resilience.
Among gainers, Vodafone rose 2.9 percent after an investor day in Spain and Italy which analysts agreed gave clear evidence of value creation in both countries.
Corus Group rose 5 percent on renewed bid speculation. The shares had suffered recently on concerns about future steel oversupply from China.
Among other standout gainers, Brambles Industries rose 3.4 percent after a 2.3 percent rise in Australia as bid talk resurfaced.
U.S. crude extended Tuesday's 3 percent decline to reach $58 a barrel based on expectations of a rise in U.S stockpiles and no imminent OPEC supply cuts.
Royal Dutch Shell slipped 0.5 percent. BP rose 0.6 percent on sentiment its 11 percent three month decline was overdone despite a cautious trading statement on Wednesday.
Strategic buyers of BP have emerged at these levels, although difficulties in Russia are yet to come to the fore, said Richard Hunter, head of research at Hargreaves Landsdown.
British Airways rose 1.3 percent because of cheaper oil, ahead of reporting its Sept traffic figures at 2:00 p.m. Ryanair Holdings firmed 2.1 percent after it upped its profit guidance.
Miners were hit by a fall in most metal prices, although gold made a cautious comeback. BH Billiton fell 2.8 percent, followed by Anglo American, down 2.6 percent, and Kazakhmys dropped 2.4 percent.
Among other standouts, PartyGaming fell 5.5 percent, extending a 67 percent fall earlier this week on press reports it will have to negotiate a new loan facility within 30 days once President George Bush signs into law a bill against foreign Internet gambling in the U.S.
BG slipped 6.6 percent, which traders attributed to the decline in British wholesale spot gas prices. Drax Group fell 3.9 percent and International Power slipped 2 percent.
BAE Systems fell 0.9 percent. It said proxy votes, accounting for over 70 percent of shareholders, voted in favour of selling its non core Airbus stake to EADS.